whole foods market 1. introduction background . whole... · whole foods market 1. introduction...

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  • Whole Foods Market 1. INTRODUCTION Background Whole Foods Market is a natural grocery store chain with 290 stores throughout the United States, Canada, and the United Kingdom. Founded in Austin, Texas in 1980, Whole Foods has consistently ranked in Fortune Magazines Top 100 Best Companies to Work For, placing 22nd on the 2009 list. The company has long been recognized for its unique human resource strategies that exist as reflection of the founding mission and values of the company. Whole Foods Market is in many ways has been shaped by its human resource practices such as its mission, strategy, goals, benefits, structure, and reward systems. Values and Culture Any study of the human resource practices and policies of Whole Foods Market must begin with a look at the values and culture of the company. John Mackey and nineteen others founded WF (Whole Foods Market), with the vision of providing the highest quality natural and organic foods available in a supermarket format. Five years later, the vision was further articulated in the Declaration of Interdependence, a document drafted by sixty employees establishing the WF motto as Whole Foods, Whole People, Whole Planet. It states that the mission of WF is to sell the highest quality natural and organic foods, satisfy and delight our customers, and create store environments that are inviting, fun, unique, informal, comfortable, attractive, nurturing and educational (History, 2008). What is most striking is not the content of this message, but the degree to which the vision is reflected in the words and actions of its employees. From the front office to the store shelves and check-out line, the legend of how the business began and the inspiration behind it were driving forces in the work of employees. Empowerment, accountability, passion about good food, enabling individuals, fun and happy were words consistently heard when employees answered about what the values of WF were comprised of, again reflecting the transparency of the organizations core values at every level. Also, consistent leadership and the managerial structure at WF have created an environment where employees feel safe, cared for, and driven to succeed. WF seeks high commitment rather than high control of its employees, and this was evident in the degree of alignment we saw between employees and

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    the mission and goals of the company. Every employee we spoke with told a surprisingly consistent version of WF legend, from the store leader (as the location manager is titled) to a team member (as every employee is known) pushing carts in the parking lot. They each knew that WF was founded with the mission of selling quality, healthy food, and doing it with exceptional customer service, or as one team member found stocking in the freezer isle put it, a vision about natural, organic and customer service (personal communication, October 9, 2008). Each team member learned about this during their extensive training period, which focuses on the unique culture of WF. More than being aware of the story, when employees were asked if they identified and were attracted to what the company was founded on, they nearly all responded that they were excited and proud to be a part of what John Mackey began. The concept upon which WF was founded was something that attracted them to the company and made them feel good about their work there. This feeling can be summed up with the words of one of the department team leaders when he told me that WF has created a community, more than just a business (personal communication, October 9, 2008). One team member in the spice aisle told me that he had worked in several WF locations across the US, and that this feeling of community was consistent within all of the stores. He stated that he worked at WF because of the culture. The store leader, who had been with WF for 18 years, went one step further and told me that the business was still driven by the founding mission, and what comes with that is team members that want to align their personal belief system with the company they work for. And also customers who want to shop in an organization that is aligned with their personal belief system (personal communication, October 10, 2008). Employees Whole Foods employs 54,000 employees world-wide, who are primarily categorized within the stores by departments or teams as they are know at WF. The largest of these teams is prepared foods, and other examples of teams are customer service, seafood, produce, etc. Each team is decentralized and led by a team leader and an assistant team leader who facilitate the team-based hiring and orientation process, as well as performance reviews (Erickson, 2007). Strategy and Goals Whole Foods Market is a higher-end grocery store looking to establish itself as a value added supplier of not only natural foods but also restaurant

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    quality prepared foods not found in a traditional American grocery store. Since its founding in 1980, WF has grown rapidly and currently has no plans to slow that growth. In 2006, CEO John Mackey announced that the company had plans to double sales to $12 billion between 2006 through 2010. In 2007, the chain acquired rival natural grocer Wild Oats for $565 million, adding 110 stores in the process, and built an additional twenty one new stores in the US. Whole Foods aggressive growth in recent years is part of its plan to maintain and establish its position as the number one retailer in the growing natural foods market, and compete with the other national supermarket chains such as Safeway and Wal-Mart. Since 2008, double-digit sales growth has turned flat or negative and WFs stock price has fallen accordingly. Current speculation and the announcement of the sale of seventeen percent of its equity to a private equity firm calls into question whether WF can continue to succeed under its existing management and perception by consumers as a high-cost grocery retailer (Sweibach, 2008).

    2. EMPLOYEE INFLUENCE

    At Whole Foods market, employee influence is more than just a concept. The management team has successfully used it not only as a tool for reinforcing the core company beliefs, but also as a competitive advantage. There are many companies who say that they value employee input, while they actually never ask for it or rarely consider it if it is given. WF looks at this concept in a fundamentally different way from many other companies, as can be seen through their everyday practices. Newcomers to the WF family can tell from their first day just how much employee input is valued. Specifically, when someone has recently been brought into WF, they go through a training period whereupon completion, fellow employees vote on how well they think the trainee has performed. There is a form that the employees fill out to evaluate the specific skills the potential hire has exhibited over the training period. In order for the trainee to be hired, at least two thirds of the evaluations must come back positive overall (with at least three fourths of the department employees present to vote). The fact that WF will not hire someone without input from the employees that will be working with the new person demonstrates just how seriously they take the empowerment of their workforce.

    Another sphere of the business where WF lets their employees make crucial decisions is the benefits package. Every three years each employee gets to vote on the breakdown that they would like to receive in terms of their

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    benefits. For example, some people value health insurance most, some dental, while there are those who would prefer to see their pets covered. Everyone ranks the benefit options in order of importance to them. Whichever benefits have the most votes will in turn get the most funding. The total amount of money used to cover these benefits is a set amount determined by the corporate headquarters. The employees however have total control as to how that money is divided between benefit options.

    This voting process is somewhat formal, as it only happens every three years and is very important to getting the desired distribution correct, as it directly affects employees livelihood. This formal process is not indicative however of the overall feel the HRM practices at WF. Typically, things are much looser and less regulated. For example, when an employee has an idea and would like to make a suggestion to the team or store leader, there is no formal process that they must go through. They can simply just go up and talk to whoever has the authority to carry out the decision, citing reasons why they believe it will help the store. If the manager deems it a good idea, then it will be put into action, with no formal approval process necessary. WF managers believe the employee suggestions and ideas to be critically important to the success of each store, as they have a better understanding of what customers want and need.

    There are, of course, cases where employee suggestions were attempted and never worked out as planned. For example, Wendy, the HR Manager of the Tamarac WF told us about an employee who had an idea to turn the meeting room into a Christmas tree and ornament shop for the holiday season this past year. The manager liked the idea, and a few weeks later the seasonal section of WF was opened. The problem was that they never scheduled extra people to specifically man this new section. This caused many problems, as grocery workers were pulled from their usual tasks to make sure people were being helped with the Christmas trees, slowing productivity. The idea was shut down after only a couple of days. The thing that impressed our group the most with WF was their attitude about this failure. They realized that the positives associated with empowered employees getting